2006/745/EC: Commission Decision of 8 March 2006 on State Aid — France — Aid to rescue and restructure the Air Lib company (notified under document number C(2006) 649)   (Text with EEA relevance)
Date: 2006-03-08
Institutions: European Commission
Subjects: France, State aid, aid for restructuring, aid to undertakings, air transport, control of State aid, transport company

7.11.2006

EN

Official Journal of the European Union

L 307/205

COMMISSION DECISION

of 8 March 2006

on State Aid — France — Aid to rescue and restructure the Air Lib company

(notified under document number C(2006) 649)

(Only the French text is authentic)

(Text with EEA relevance)

(2006/745/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(6)

Having regard to the Treaty establishing the European Commu-
nity, and in particular the first subparagraph of Article 88(2)
thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1),

Whereas:

(7)

I.

PROCEDURE

(1)

By letter of 22 January 2002 France notified the European
Commission of aid to rescue the airline parent holding
company AOM Air Liberté (hereinafter referred to as ‘Air
Lib’ or ‘the company’).

(2) Having been implemented unlawfully, before its approval
by the Commission, this measure was registered as non-
notified aid under number NN 42/2002.

(3)

(4)

(5)

By letter of 24 January 2003 (SG (2003) D/228222), the
Commission informed France of its decision to initiate the
procedure under Article 88(2) of the Treaty in respect of
this aid.

The Commission decision initiating the procedure was
published in the Official Journal of the European Commu-
nities (2). The Commission invited interested parties to
comment on the aid in question within one month of the
date of publication, i.e. by 11 May 2003.

The Commission has received comments on this subject
from one interested party by letters of 9 and 12 May 2003.
Following the Commission's request made on 21 May, this
third party agreed to waive the confidentiality of
its
comments. The comments were therefore conveyed to
France by letter of 23 June 2003 and France was given one
month to respond. At the same time, France responded to
the initiation of the procedure by letter of 19 May 2003.

(1) Decision of 21 January 2003 published in OJ C 88, 11.4.2003, p. 11.
(2) See footnote on page 1.

II.

DETAILED DESCRIPTION OF THE AID

Context

Following the decision by their former shareholders, and
particularly Swissair, to no longer continue their investment
strategy, and confronted with a lack of new investors, the
companies Air Liberté AOM (formerly AOM Minerve), Air
Liberté and five subsidiary companies were subject
to
compulsory administration proceedings by the Créteil
Commercial Court on 19 June 2001. On 27 July 2001,
the Court handed over the assets of
the administered
companies for one symbolic franc to the Holco company,
then to any subsidiary which it controlled. Air Lib (the trade
name of the parent holding company AOM Air Liberté SA),
a subsidiary of Holco SAS, itself owned almost 100 % by
Mr Corbet, was constituted to this effect on 24 August
2001.

(8) On 1 August 2001, the Court also endorsed the principle of
the transaction proposed by the former
shareholders
through which Swissair undertook to pay FRF 1,5 billion
(i.e. €228,7 million). By the beginning of September 2001,
before its own bankruptcy, Swissair had in fact paid over
only FRF 1 050 million (or €160 million). Following this
lack of funding and the additional difficulties caused by the
events of 11 September 2001, the company forecast losses
in 2001 and 2002. So France provided aid to rescue the
company. €16,5 million of this aid, to last for a maximum
of six months, but renewable and as a part of a maximum
amount of €30,5 million (FRF 200 million) had already
been paid by 9 January 2002. The balance of €14 million
was paid on 28 February 2002. This aid would have
covered only a part of the company's short-term require-
ments. In the absence of any notification of a plan to
restructure the company or proof that the loan had been
reimbursed, the Commission pointed out to France on
9 July 2002 that it was pursuing its analysis of this dossier
from the angle of an aid for restructuring that had been
granted unlawfully.

L 307/206

EN

Official Journal of the European Union

7.11.2006

(9)

It appeared that the company had proceeded to open many
new routes according to information which appeared in the
press or on its own Internet site. Initially, as from winter
2001, a new route to North Africa was opened while from
April 2002 low-cost flights were offered in France under
the name of Air Lib Express. Finally, as from the end of
October 2002, Air Lib introduced low-cost flights from
Paris to Italy. Meanwhile, it also appeared that commercial
debts had remained outstanding or specific advances had
been granted;
these included the deferment of social
security contributions, advances paid by Air France,
exemption from VAT, etc. Thus, on 1 November 2002,
still according to the press, Air Lib owed debts totalling
approximately €90 million to various public bodies or
companies. There were also plans for a Community
shareholder, the Dutch group IMCA, to take over Air Lib.

III.

COMMENTS FROM INTERESTED PARTIES

(10)

In its comments to the Commission, the interested party,
the French airline SA Corse Air International (hereinafter
referred to as ‘Corsair’) basically transmitted legal docu-
ments showing the action it had taken before the French
courts. At the beginning of 2003, Corsair had summoned
Air Lib to appear before the Créteil Commercial Court
because of
the unlawful aid from which Air Lib had
benefited according to Corsair, demanding that the aid be
paid back and asking the Court to order the cessation of the
activities which Corsair
abovementioned commercial
deemed to be unfair practices resulting from the said
unlawful aid.

(11) By a ruling of 12 February 2003, the Court, having regard
inter alia to the procedure initiated by the Commission,
declared that it had no jurisdiction in this matter. By
submitting information, Corsair had hoped that
the
Commission would formulate the opinion that the decision
of the Court was in conflict with its own decision-making
practice and with Community case law.

(12) Corsair had also adduced arguments in support of the
criticism levelled by the Commission at the initial State aid,
the company's commercial development and the other
fiscal and social support measures from which the company
was alleged to have benefited.

Court ruled on 17 February that the company should be
wound up; this ruling was upheld on appeal on 4 April.

(14) As there appeared to be no way of resuming the company's
activity, the coordinator of the airports of Paris in the
meantime reallocated the slots, totalling about 35 000 ,
that had thus become available.

(15) Accordingly, France has pointed out that in its opinion the
investigation procedure initiated on 21 January
formal
2003 was now no longer
relevant as court-ordered
liquidation is one of the grounds for ending entitlement
to State rescue aid provided for
in the Community
guidelines.

V.

CONCLUSIONS

(16) The Commission notes that the activities of the beneficiary
of the aid came to an end without its activities being taken
over by any third party in the course of legal proceedings or
any other procedure. Consequently, this ended all potential
distortion of competition resulting from the measure
implemented by the French authorities for the benefit of
Air Lib.

(17) Moreover, the Commission recalls that paragraph 23d of
the Community guidelines on State aid for rescuing and
restructuring firms in difficulty, published in 1999 (3),
provides that the liquidation of a company is one of the
grounds for terminating rescue aid.

(18)

In view of the above, the formal investigation procedure
initiated on 21 January 2003 pursuant to Article 88(2) of
the EC Treaty has become devoid of purpose,

HAS ADOPTED THIS DECISION:

Article 1

The procedure of Article 88(2) of the EC Treaty initiated on
21 January 2003 against the holding company AOM Air Liberté,
known as ‘Air Lib’, shall be terminated.

Article 2

IV.

COMMENTS BY FRANCE

This Decision is addressed to the French Republic.

(13) On 19 May 2003 the French authorities informed the
Commission that, following the failure of IMCA's bid to
take over Air Lib, they had decided on 5 February 2003 not
to renew Air Lib's temporary operating permit which
expired on that date. Consequently,
faced with serious
financial difficulties, Air Lib filed for bankruptcy with the
Créteil Commercial Court on 13 February 2003 and the

Done at Brussels, 8 March 2006.

For the Commission

Jacques BARROT

Vice-President

(3) OJ C 288, 9.10.1999, p. 2.